Tuesday, October 27, 2009

Washington, D.C. – Representatives Dina Titus of Nevada and Pete Olson of Texas introduced bipartisan legislation today to strengthen small businesses by increasing the amount they can deduct from their federal tax filings for meal and entertainment expenses.  The Helping Small Businesses Grow and Prosper Act of 2009 allows small businesses that employ 50 or fewer people to deduct up to 80 percent of these expenses from their filings, up from the current level of 50 percent.

“Small businesses are the engines of growth that drive our economy, and during this tough economic time, we must foster an environment that will help our small businesses thrive,” Congresswoman Titus said.  “With some of the most important businesses meetings held over a meal, increasing this important deduction will greatly benefit small businesses through additional tax relief that will make them more competitive with larger companies.”

Representative Pete Olson said: “Small businesses are the backbone of our economy and will propel our recovery.  It should be our mission to help these primary sources of job creation in ways that enable them to more effectively create and maintain their business relationships.  This common sense tax provision will ensure that small businesses are able to compete with larger ones to attract new business or clients.”

Establishing and maintaining strong connections with customers and clients are essential for small businesses.  Unlike their larger competitors, small businesses do not have large budgets for advertising, so building lasting relationships and finding innovative ways to attract customers are vital.  Many of these relationships are developed over meals and at other events.  A 2004 study by the Small Business Administration noted that “small firms obtain significant benefit from the partial deduction of travel and entertainment expenses and derive greater benefits from the program than do large firms.  Small firms use the meals and entertainment deduction as their primary marketing tool.”  In order to qualify for this deduction, the expense must be either directly related to or associated with business activity.

The Helping Small Businesses Grow and Prosper Act has been endorsed by the National Federation of Independent Business, the National Restaurant Association, and the National Small Business Association.

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Tags: economy, tax relief